According to 'The Sunday Times', education secretary Michael Gove wants inspectors to fail schools where "religious conservatism is getting in the way of learning and a balanced curriculum".
This would mean that governing bodies and head teachers of schools judged inadequate on such grounds can be replaced.
The move is primarily focused on Birmingham, UK's second biggest city, where claims that secular schools have been taken over by Islamic hardliners are already being investigated, the newspaper claims.
Fifteen schools in Birmingham have been inspected this month by Ofsted, the schools inspectorate, at the request of the Department for Education (DfE).
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The reports, due to be published later this month, are expected to find a common pattern of problems in some of the schools inspected.
Allegations include the takeover of governing bodies by Islamic fundamentalists, harassment of non-Muslim heads, bullying of female staff and the segregation of girls and boys in lessons.
If enough of the schools are judged "inadequate" by Ofsted, a second wave of snap inspections of state and private schools in the city, many run by Muslim heads, will begin, DfE sources were quoted as saying.
"It is absolutely vital these investigations are carried out impartially, without pre-judgment.